Can you Really Keep your Doctor with a Narrow Network?

One of the key selling points of the Affordable Care Act was the promise that “you can keep your doctor, period.”

Not so fast.

In fact, millions of Americans who have or will be signing up for medical coverage via the online exchanges established by the ACA are due for a nasty surprise: Most of the plans available via the exchanges come with significant network restrictions, and in many case will not provide in-network coverage to the most sought-after hospitals, clinics and physicians in their markets.

The issue: In order to control costs, the Affordable Care Act relies a great deal on the managed care model employed by health maintenance organizations (HMOs) preferred provider organizations (PPOs). Here’s how it works:

Managed care organizations try to get as many subscribers as possible within a certain market, such as a city, state or zip code. They then approach the medical care providers in the community and use their large subscriber base as a bargaining chip. They offer the medical care provider or institution the prospect of a significant flow of referrals. In exchange, they ask hospitals and clinicians to take a much lower reimbursement rate.

The arrangement is known in health care circles as the “narrow network” concept. The smaller the network, the more value the stream of referrals has to those providers included in the network. Expanding the network to too many care providers also dilutes the value of the stream of providers.

The result: the system is skewed in favor of the lowest cost providers. Those with higher fees – the best specialists and hospitals in the greatest demand, and who have made the most investments in technology and training, for example – get locked out of the process. They cannot underbid the low-cost providers.

Exclusions Abound

Across the country, individuals purchasing or shopping for coverage via the networks are discovering that many or most plans don’t cover the best local hospitals. For example, the venerated Cleveland Clinic accepts dozens of private health plans offered via independent health insurance brokers and through carriers outside of the ACA exchanges. But if you buy your plan through the exchange in Ohio, only one exchange plan out of the twelve offered provides in-network coverage to the Cleveland Clinic.

As another example, Southern California Health Net has announced that individual plans sold via exchanges in that market will have access to less than a third of the number of doctors available via employer plans. Furthermore, while all the exchange plans include the Los Angeles County hospital system, most of them will not provide in-network coverage to the most respected private hospitals like Cedars-Sinai, or the top research hospitals like UCLA.

Additionally, Seattle Children’s Hospital – a popular and respected institution in Seattle, Washington, has filed a lawsuit against the state because it has been excluded from the exchanges. Of the seven plans available in King County, only two of them provide in-network coverage for Seattle Children’s Hospital.

“The notion that a major insurance plan is going to exclude us from their network is truly precedent-setting,” said Sandy Meltzer, a physician and the hospital’s senior vice president, in an interview with the Seattle Times. “[It] represents a new level of degradation in children’s access to care.”

The Bottom Line

When it comes to health insurance, the monthly premium cost is only a small part of the big picture. The proper way to evaluate any health insurance policy isn’t just premium. Instead, you should consider how likely you are going to be to be satisfied with your care options in the event you have a claim. That’s why you should look carefully not just at your premium and deductible, but also read the fine print and find out whether you will have access to the best providers in your area.

It may well be that your independent insurance advisor has options for you that you would never find on the exchanges. Indeed, many carriers have opted out of the exchange system for a variety of reasons.